Oil Prices Rise but Trade Concerns Limit Gains

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Investing.com – Oil prices continued to rise on Tuesday in , but gains were capped by concerns of intensifying trade war between China and the U.S.

U.S. were up 0.5% to $63.51. International gained 0.4% to $72.21.

Oil prices received some continued support from news that and its allies will extend production cuts beyond June.

Khalid Al-falih, the Saudi energy minister, indicated over the weekend that the kingdom will continue cutting output through the year-end at levels above compliance agreed by OPEC+. He also expressed hope that his other colleagues in the alliance would do the same.

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Oil prices rose on Monday following his comments, but came off session highs after Minister of Energy of Alexander Novak told Bloomberg in an interview that OPEC+ may need “to tweak” the current production deal when it meets next month.

One option on the table is “removing the over-compliance” with current targets, Novak said, a move that would effectively ease output cuts in the second half of the year.

Oil was also pulled down by concerns that a prolonged Sino-U.S. trade war could lead to a global slowdown.

Trade tension intensified after news of Google (NASDAQ:) suspending business activity with China’s top telecom company Huawei Technologies.

Earlier in the day, Bloomberg reported that companies including Intel (NASDAQ:), Qualcomm (NASDAQ:) and Broadcom (NASDAQ:) also decided not to supply Huawei until further notice.

Overnight, the U.S. government announced decision to temporarily ease some trade restrictions imposed on Huawei, allowing it to purchase U.S.-made goods for at least 90 days.

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Source: Investing.com